just listened to conference call very vague around capital needed for new companies, Im thinking they will need a heap of new capital to recapitalize both companies to meet rbnz criteria and if they cant separate runoff completely then new tower is still liable for insurance claims so very iffy in my opinion sounds like a plan but very risky this stock. as they say one more adverse event could be the nail in the coffin?
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New Tower would also quickly become a takeover target as its a clean business.
Do the latest earthquakes reveal that NZ risk may still be underestimated? How much more will insurance and re-insurance premiums be rising and how much can the market withstand before more and more households and business forego insurance?
just listened to conference call very vague around capital needed for new companies, Im thinking they will need a heap of new capital to recapitalize both companies to meet rbnz criteria and if they cant separate runoff completely then new tower is still liable for insurance claims so very iffy in my opinion sounds like a plan but very risky this stock. as they say one more adverse event could be the nail in the coffin?
Bad bank, new bank makes a lot of sense.
Will involve a massive injection of capital to hive off 'bad' bank so best to wait on the sidelines.
They will need to capitalize the 'bad' bank with at least the current level of equity (NTA) of $160m to satisfy RBNZ and insurance council.
169m shares on issue so a 2 for 1 at 50c?
Amount required reduced by amount from a cornerstone shareholder (say, Heartland Bank)?
Since Christchurch, it seems that many people are now discovering after the latest quakes that to "keep premiums affordable" they have to a large extent "Claytons" insurance policies: http://www.stuff.co.nz/national/nz-e...r-quake-relief
Would a policy with a reasonable excess to cover you for all risks in NZ now be unaffordable? The cost of living on the Pacific ring of fire...
Whats up with the 13.2 million declared as exposure to the Kaikoura EQ's in the last release???
I seem to recall a few weeks ago or less they declared their exposure as maximum $7.2 M
Management is pushing its luck with the recent release - it uses so many superlatives when the recent history of this company is nothing but a shambles.
How is 14 Mill down the tube in IT write offs. Who needs insurance claims to destroy shareholder wealth when you have this going on.
The company remains a speculative play only - doesnt qualify as an investment any more.
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